The government’s macro-economic forecasting agency CPB says the Dutch economy will grow 1.7% this year and 1.8% in 2016.

The improved growth figures are due to the fall in the price of the euro and lower oil prices, the organisation said in an update.

This year’s budget deficit will be 1.8%, well below the 3% limit under eurozone rules, and will fall again to 1.2% in 2016.

However, unemployment will remain an issue and will not drop as much as forecast earlier. The jobless rate, currently around 8.1% according to the official national definition, will be around 7.9% next year, the CPB said.

Finance minister Jeroen Dijsselbloem said the new forecasts show that government policy is starting to pay off.

Opposition party calls for further spending cuts are ‘unnecessary and pointless’ because they would brake growth, the minister said.